"inconceivable stupidity"..................Part two

     No doubt there were bankers who were indeed wicked and central bankers who were incompetent, though the vast majority of both whom I met during the crisis were neither.  It would be both arrogant and complacent to assume all the problems generated in money and banking arose because our predecessors, let alone our contemporaries, fell prey to "inconceivable stupidity".  Rather, like everyone else, they naturally responded to the incentives they faced.  As individuals, they tried to behave in what they saw as a rational manner, but the collective outcome was disastrous.  Because they could not affect the behavior of others, all the key actors in the drama were understandably acting in their own self-interest  ... After the event it may seem easy to see how the crisis could have been avoided by some set of actions, but no one at the time had any incentive to take them.

-Mervyn King,  The End of Alchemy:  Money, Banking, and the Future of the Global Economy